Greenspan: Labor Market Improving,Rates Must Rise Sometime

Greenspan has not backtracked on his message to the Senate Banking Committee yesterday. In testimony before the Joint Economic Committee this
morning, Greenspan says the economy is now a in a period of "more vigorous expansion" and that the labor market appears to be gradually advancing. He finds "disinflation presumably has come to an end" and admonishes again that the
Fed funds rate "must rise at some point."
Since Greenspan let fly with such hawkishness Tuesday, the market is taking today"s comments in stride. Fed Funds futures are little changed since the minutes before the testimony though the contracts beyond July fell hard at the open.

EUR/USD is getting a lift after the Greenspan comments, despite their upbeat tone. He says rates will have to rise "at some point" and it looks as if the market interprets that as being later, rather than sooner, but that requires a good bit of tea-leaf reading. Looks more like a case of sell the rumor/buy the fact, with
the market already short in anticipation of relatively hawkish comments. Stops are seen in the 1.1870/75 area. 1.1880/85 is further resistance.